What is the justification for police and civil servants getting final salary pensions?

[ladykale]

Does anyone know?

Who is funding these generous pensions if they haven't put enough in all their life / value of investments isn't equal to the value of their pension??

Everyone should get a final salary pension. Sadly the peak of private companies offering them has long passed and now it’s a race to the bottom.

I think they are career average now not final salary but defined benefit is def the way to go.

Civil servants don't get final salary pensions.

This!
They used to be the norm, we should be angry of the people responsible for ending them, not jealous of the people who still get them.
Final salary pensions, where they do exist, are much less generous than they used to be, it is a shame and a reduction in the overall salary package people are paid that was bought in by stealth.

As good as surely?

There are no final salary pensions anymore for the public sector, OP. You’re a bit out of date.

Firstly they don't. And a career average is nothing like a final salary for more people who spend their entire careers there.

However why shouldn't public servants be rewarded for career long hard work in service of the country? Why don't other employers reward their own staff through proper pension provision?

why does it bother you, and why do you think anyone except the pension company is funding them?

Awful job, great pension. Can’t get fussed about it tbh!

It's part & parcel of signing up for these jobs, the T&C's are well known and over the lifetime of a job an employee can Factor the pension into their salaries.

Plenty of public service jobs traditionally had lower salaries but higher pensions - so it was just a form of 'compulsory' saving. Until the tax rules changed in the late 90s lots of private companies had amazing final salary pensions.

Pensions are just savings, and pension payouts have to reflect the value of the investment. If you want a higher pension then save more and invest carefully.

Well there isn't a very good rationale. Hence we don't any more. Career average pension nowadays.

But they don't career average has been in place for a very long time now. And they pay a LOT towards them too. And mostly with little recognition or appreciation for the efforts they put in and things they have to put up with, not least being right at the bottom for payrises.

It's for keeping their mouths shut for a lifetime. Otherwise they could sell their stories and make good money. That's the real reason, which is why it never changes. A lifetime of silence for good money.

That’s how I feel about it too. Final salary pensions that still exist are usually reduced to a formula like 1% times years of service..so most you’d get is maybe 45% of your final salary.

They’re going extinct and this whole idea of make employees put money into stocks and shares as a pension “pot” for retirement is shit.

Do you know what 'final salary pension' means? Do you think it means you get your final salary as a pension every year for life?

It doesn't (didn't).

It means your pension is based on the amount you earned during your employment AND the length of time you worked. So if you weren't there long, you wouldn't get as much as if you had worked there longer.

So: given that all employers now are required to make pension contributions, what would be your justification for public service employees NOT getting a pension?

They aren't that great anymore only the ones retiring now will have good ones. You used to get special status for jobs and retire at 55 it will now be probably 70 but it's not an pure office job. I doubt many 70 years old will be fit enough to do it. I wonder if they will change it so more physical work allows earlier retirement.

The IFS has a lot of material on pensions generally, including public sector pensions: the challenges and how to think about addressing them. The big problem isn't defined benefit pensions in the public sector, it's the removal of them in the private sector which means that individuals are forced to take significant investment risk themselves and are often well under-prepared for retirement.

Hopefully useful reading list from the IFS

We don't get them anymore. Haven't for about 15 years. So there's that.

Did you know that the AOs processing Universal credit are now on the minimum living wage? Regardless of length of service. The pension isn’t any good anymore.

Civil Service pay rates are significantly below comparable roles in the private sector once you get to middle management grades and above. Therefore most people make a choice for a higher pension and lower pay. As others have pointed out it’s now a career average scheme.

Apply for a job at the council then OP?

What is it tonight with all the complaints about Police pensions

Not sure my husband who has been a civil servant for a bloody long time knows anything worth selling... I can imagine his proposal "dear journo, I know lots of very mundane statistics about local housing. Please send me thousands of pounds and I will reveal all."

Also, it isn't a final salary pension any more. And he's put up with a crap salary (especially for London) for years with very few pay rises.

You can always become one yourself if you fancy OP.

No, nowhere near as good as. Others have pointed out its now career average rather than final salary - this is a massive reduction for most people (I don't have a crystal ball but I would estimate it will be a 40-60% reduction for me). The percentage contribution has more than doubled during my career as well.

I would say it should still be a comfortable pension, but this idea that it's an amazing handout which hasn't been earned is a bit false (and, dare I say, a bit goady).

Final salary (defined benefit) pensions used to be commonplace across both public and private sector, and were generally considered a fair recompense for several decades of hard work. As has been pointed out upthread, it shouldn't be a race to the bottom.